Modern tech trail is fraught with danger for entrepreneurs
By Terry Troy
If Horace Greeley were alive today, he would probably say something like, “Go tech, young man.” He would also apologize to the millions of women who have broken into and been successful in the tech industry.
Gender biases of past pioneer generations aside, the tech industry is America’s new frontier. And like generations past, it is a trail fraught with its own dangers for men and women who dare to traverse its path.
Take Cuyahoga Falls-based and Kickstarter-funded startup Fuse Chicken as a case in point. Founder and CEO Jon Fawcett is no stranger to innovation and product design.
“I worked for 20 years designing products for Fawcett Design, Inc., a company my father started in the late ‘80s,” says Fawcett. “We designed everything from vacuum cleaners to toys to parts for aircraft. I ended up taking over the company when my father was nearing retirement.”
When you work designing new products every day, ideas pop into your head non-stop—even at the most unexpected times. Like any innovation, the idea for a Fuse Chicken’s new phone charging accessory was one of those “light bulb” moments that happened in the middle of the night.
“I was in bed and rolled over to look at my phone as an alarm clock, but I couldn’t see it because it was laying flat on the night stand,” Fawcett recalls. “I remember thinking about gooseneck stands for microphones, and the light just popped on. Why couldn’t we throw a cable through the middle of one of those, shrink it down and customize it so it would hold your phone in any position?”
Using his extensive factory and manufacturing contacts from his father’s company, Fawcett had some prototypes made.
“When the first one came back, it worked exactly like I had envisioned it in my head,” Fawcett recalls.
Approximately four months later in 2012, Fawcett went to Kickstarter to help fund his project, hoping to raise just enough capital to build a few products.
“We loved the product and we loved the idea,” says Fawcett, who claims the unusual name for the company was chosen because it was unique and would be easier to find on a search engine. “We weren’t expecting to launch a consumer electronics business. We initially only planned to make between 200 and 1,000. I figured we’d sell a few and I’d have one on my nightstand. So we were only asking for $10,000.”
But Fuse Chicken wound up with more than $200,000. Naturally, there were some growing pains.
“We soon found out that we knew how to design and manufacture our product, but we also had to ship them,” says Fawcett. “We had to figure out the logistics.”
Still, the product was taking off, and taking off quickly. By the time it was all over, the company had shipped 17,000 units to approximately 50 countries around the world. The company even received a product review in Wired.
“And we sold something like 400 units in the first few hours,” Fawcett recalls.
So when the New York Times called asking about a company product to review, Fawcett was more than willing to accommodate. He agreed to provide a Bobine Auto, a flexible iPhone dock, and one of Fuse Chicken’s premier products. It also was the item Fawcett had designed himself.
“So we had a product shipped to [the newspaper] from Amazon because you can ship it really cheap with next day shipping,” says Fawcett.
A few days later, the product reviewer reached out to Fawcett, asking, “What is this?”
Turns out the Times reviewer had received a cable-based product, but not Fuse Chicken product, even though it had a sticker identifying it as Bobine Auto.
“So he gets this rubbish product with a sticker identifying it as our product,” says Fawcett. “But it looks like a wiring harness, like something you would find under your dashboard.”
Naturally, it cost Fuse Chicken what might have been a very lucrative product review in the New York Times. But the problems didn’t stop there. Fawcett started receiving complaints from people who were purchasing the counterfeit knockoffs from Amazon. The action was potentially damaging to his fledgling company’s brand.
“It’s bad enough when someone is marketing and selling an inferior product with your name on it that you know is not yours,” says Fawcett.
So Fawcett started sending out notices to Amazon that for the large part went unanswered.
What started out as a random trickle soon grew into a waterfall in the fall of 2016. And it’s easy to see how it happened. Fuse Chicken’s product retails for more than $30, while counterfeits may retail for less.
“We soon found ourselves sending out hundreds of notices to Amazon, which eventually grew to over 1,500,” Fawcett says.
Clearly, the protocols Amazon had in place to protect this sort of thing from happening were simply not effective. Amazon told Fawcett to contact the seller and get information from it to file copyright or trademark infringement, says Fawcett. Unfortunately, counterfeit sellers are not quick to reply to the folks they are ripping off.
Fuse Chicken is trademarked and its product designs are patented in the U.S., E.U. and China, with patents pending in South Korea and Philippines. So you would think that the company would not have to worry about such issues. Unfortunately, that is just not the case with budding entrepreneurs and small startups like Fuse Chicken.
Today, the matter is in the courts with Fuse Chicken in a David versus Goliath fight against the nation’s largest e-commerce retailer.
“It’s not just selling one product, or losing out to a counterfeit product, it’s also the time that I have had to spend battling all of the counterfeits being sold,” says Fawcett. “I spend the majority of my time doing it. It has literally chopped off our company’s growth at the knees.”
So what advice would Fawcett give to other budding entrepreneurs?
“Be diligent,” he says. “Make sure you have control over where your product is sold, who it is sold to, and make sure you are tracking everything so you can catch all the issues.”
This is, indeed, a cautionary tale offering sage advice for all those traveling down the modern high tech trail.